The LMM Is RAINING Zero-Money Down Acquisition Gurus... What to think?

04/04/25 • 17 min

Key Ideas and Facts:

The AI breaks down a recent LinkedIn post by Ben Kelly (and the comments) about his zero-money down business acquisition process.

Background: Ben Kelly acquired three businesses (SaaS, Nail Salon, and Web Design) while working as a W-2 employee. He claims to spend only 2 hours per week on one of them, and none on the other two.
SaaS Company: Revenue - $1,318,163, Cash Flow - $150,000, Weekly Effort - 2 hours
Nail Salon: Revenue - $1,124,889, Cash Flow - $30,000, Weekly Effort - None
Web Design Company: Revenue - $256,667, Cash Flow - $10,000, Weekly Effort - None
8-Step Acquisition Strategy: The post outlines an 8-step strategy for acquiring a small business while employed:

SBA Loan Application: Apply for an SBA loan at a bank, providing a business plan, W-2 pay stubs, tax returns, and a personal financial statement.
Financial Audit: Audit Profit and Loss statements (P&Ls) and tax statements. Kelly suggests offering an accountant 2.5% equity in the business in exchange for their services.
Seller Communication: Understand the seller's motivation, prioritizing retiring owners with well-built businesses. "I love buying from retiring boomers because I know their businesses are usually built well & the reason for selling isn't to do with a business flaw."
Private Investor Search: Find a private investor, potentially through your network or LinkedIn.
Financial Analysis and Offer: Analyze Seller's Discretionary Earnings (SDE), which Kelly equates to cash flow. Make an offer of 2.3x the SDE. "If SDE is $1M, make an offer of $2.3M."
SBA 7a Program and Investor Equity: Use the SBA 7a program where a private investor covers the 10% down payment on the loan in exchange for a 15% equity stake (a 50% equity bonus on their 10% down payment). "Essentially, they get 15% equity for paying 10% down. You're $0 out of pocket."
Business Management: Implement changes to run the business "passively" using employee bonus schemes, hiring a general manager, and building out systems. "Your staff are incentivized and able to run daily operations without you being there."

Find that full post here: https://www.linkedin.com/feed/update/urn:li:activity:7295804728960028672/

DISCLAIMER: The BizNexus Roundup podcast features AI hosts whose analysis is based entirely on pattern recognition and reports created by actual human experts. While our hosts can process vast amounts of data, they've never actually closed a deal or sat in a boardroom.

Our discussions draw from publicly available sources and expert insights, but we strongly encourage listeners to consult the original documents and reports referenced in each episode for the complete context and analysis. The AI hosts' market predictions and deal assessments, while data-driven, are no substitute for professional human judgment and due diligence.
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Show Credits

Intro Music Artist: DJ Freedem | Track: Pretty Boy

Key Ideas and Facts:

The AI breaks down a recent LinkedIn post by Ben Kelly (and the comments) about his zero-money down business acquisition process.

Background: Ben Kelly acquired three businesses (SaaS, Nail Salon, and Web Design) while working as a W-2 employee. He claims to spend only 2 hours per week on one of them, and none on the other two.
SaaS Company: Revenue - $1,318,163, Cash Flow - $150,000, Weekly Effort - 2 hours
Nail Salon: Revenue - $1,124,889, Cash Flow - $30,000, Weekly Effort - None
Web Design Company: Revenue - $256,667, Cash Flow - $10,000, Weekly Effort - None
8-Step Acquisition Strategy: The post outlines an 8-step strategy for acquiring a small business while employed:

SBA Loan Application: Apply for an SBA loan at a bank, providing a business plan, W-2 pay stubs, tax returns, and a personal financial statement.
Financial Audit: Audit Profit and Loss statements (P&Ls) and tax statements. Kelly suggests offering an accountant 2.5% equity in the business in exchange for their services.
Seller Communication: Understand the seller's motivation, prioritizing retiring owners with well-built businesses. "I love buying from retiring boomers because I know their businesses are usually built well & the reason for selling isn't to do with a business flaw."
Private Investor Search: Find a private investor, potentially through your network or LinkedIn.
Financial Analysis and Offer: Analyze Seller's Discretionary Earnings (SDE), which Kelly equates to cash flow. Make an offer of 2.3x the SDE. "If SDE is $1M, make an offer of $2.3M."
SBA 7a Program and Investor Equity: Use the SBA 7a program where a private investor covers the 10% down payment on the loan in exchange for a 15% equity stake (a 50% equity bonus on their 10% down payment). "Essentially, they get 15% equity for paying 10% down. You're $0 out of pocket."
Business Management: Implement changes to run the business "passively" using employee bonus schemes, hiring a general manager, and building out systems. "Your staff are incentivized and able to run daily operations without you being there."

Find that full post here: https://www.linkedin.com/feed/update/urn:li:activity:7295804728960028672/

Learn More About BizNexus

Show Credits

Intro Music Artist: DJ Freedem | Track: Pretty Boy

Previous Episode

M&A Market Outlook from RKCA

RKCA, an investment bank focused on privately-held lower middle market businesses, presents its outlook for the 2025 M&A market. The firm anticipates a strong year driven by significant private equity dry powder and increasing activity from family offices and individual investors.

While senior lenders are cautious and the cost of capital has risen, "quality" companies with strong financials, documented processes, experienced management, and resilience will command premium valuations.

RKCA advises business owners considering a sale to begin preparation early, emphasizing that a proactive and well-managed process yields the best results. They offer services to evaluate businesses and guide owners through various transaction scenarios, aiming for client success.

Find information on RKCA Investment Banking here: https://www.linkedin.com/company/rkca/posts/?feedView=all

Find the full post here: https://www.linkedin.com/posts/rkca_rkca-2025-ma-market-outlook-activity-7298444358574358528-pBBO?utm_source=share&utm_medium=member_desktop&rcm=ACoAABGzL5gBDtJNUCsnAPn6tKYpDHZSNFxIWh8

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Intro Music Artist: DJ Freedem | Track: Pretty Boy

Next Episode

According to Forbes- Individual Business Buyers Are Flooding The Market

According to Forbes, an increasing number of individual buyers are entering the business acquisition market, yet the supply of quality businesses for sale has not kept pace. Despite heightened demand, median sale prices have only modestly increased, partly because the anticipated wave of Baby Boomer-owned businesses hasn't fully materialized.

Social media trends promoting unrealistic acquisition strategies and the rise of inexperienced individuals mislabeling themselves as "Searchers" contribute to confusion and inefficiency. Furthermore, securing financing remains challenging for many individual buyers, and online communities of novice buyers often lack helpful expertise.

Ultimately, practical experience and targeted learning from established experts are crucial for successful business acquisition, outweighing formal education or self-proclaimed titles.

Read that full article here: https://www.forbes.com/sites/richardparker/2025/02/17/individual-business-buyers-are-flooding-and-messing-up-the-market/

Learn More About BizNexus

Show Credits

Intro Music Artist: DJ Freedem | Track: Pretty Boy